Lack of digital means raises hackles of small traders as D-Day draws near

Confederation of All India Traders (CAIT) wrote to the GST Council on Monday expressing these concerns. CAIT has also demanded setting up of digital kiosks at commercial markets, where these enterprises can do online transactions, and file tax returns.B V Shiva Shankar | TNN | June 27, 2017, 14:43 IST

BENGALURU: One of the cornerstones of the goods and services tax (GST) regime, set to be implemented from July 1, is digitisation of the entire tax process. However, it’s come to light that more than 60% of small businesses have not adopted digital means for their operations. Consequently, trade bodies have urged the Centre to devise a mode that can ensure tax compliance by small businesses.

Confederation of All India Traders (CAIT) wrote to the GST Council on Monday expressing these concerns. CAIT has also demanded setting up of digital kiosks at commercial markets, where these enterprises can do online transactions, and file tax returns.

Secretary general of CAIT Praveen Khandelwal said, “A study we commissioned has revealed that over 60% of small traders who’ll be covered under GST are yet to digitise their business. They don’t own a computer, since under the exisiting VAT regime, tax returns were done through paperwork.”

Since their annual turnover is limited to a few crores at most, most small traders did not bother to integrate themselves with the digital network.

Pointing out that there were about six crore small businesses across India, Khandelwal said, “Of these, around one crore traders have an annual turnover less than Rs 20 lakh, and don’t have to register under GST. And nearly one crore others, who have a turnover between Rs 20 lakh to Rs 75 lakh, can opt for composition tax (COT), but have to register under GST. The remaining ones now have to register under GST. But, who will help them?”

Taxation committee chairman for the Federation of Karnataka Chambers of Commerce and IndustryBT Manohar said, “The government has to take trade associations into confidence, and set up GST kiosks for the benefit of small traders.”

Officials on the GST Council said that the Centre had taken stock of the issue, and plans were afoot to set up these kiosks across the country, including small towns and taluk headquarters. The state government is proposing to use centres such as Bangalore One, and E-Seva Centres to this end. “The government is there to help taxpayers,” said DP Nagendra Kumar, principal additional director general of central excise.

Pointing to the elaborate arrangements being made to help integrate taxpayers with the digital system, Nagendra Kumar said, “GST Seva Kendras will be established in commercial tax and excise offices, where people can log into the GSTN portal and perform online transactions. The government will appoint GST practitioners to help small traders.”

The government had also identified 34 private agencies – GST Suvidha Providers (GSPs) and Associated Suvidha Providers (ASPs) – to provide IT solutions for medium and large enterprises, Nagendra Kumar said. “GSPs and ASPs have already started developing their own software,” he added.

However, the Centre is yet to notify the GST Act that was passed in the Parliament, along with the rules that govern its implementation. “Without the rules getting notified, we are not sure what system we should develop the software for,” said a senior official with a designated GSP.

An official with an ASP said, “My company is still confused if we’re developing a package for taxpayers or if the software’s role will be restricted to provide a pathway for the GSTN portal.”

The delay in notifying the tax rules has both traders and the service providers surprised. “It’s just three days to the rollout of GST, and the tax rates are yet to be officially notified,” said Manohar.

“From July 1, the government must ensure that taxpayers have clarity about the rules and formats of GST. Otherwise, we’d be entering a chaotic system,” he added.

Technology a must in new system

GST relies entirely on online transactions, and traders need to have electronically generated tax invoices and bill of sale from day one of the GST regime. Traders have to periodically upload details of purchase and supply on the GSTN portal, besides having to file tax returns online. All tax payments will be made through netbanking – payments in cash will be accepted only if they are under Rs 10,000. Traders also have to generate an e-Way bill to monitor movement of goods.

Relaxation unlikely to help traders

Although the government has given traders till August 10 to file their first tax returns under GST regime and till September 5 to make their first tax payment, businessmen point out that it’s of little use. “We need computers right from day one of the new regime,” said a trader.

The all-equity merger deal includes an exchange ratio of 4.39 HUL shares for each GSK Consumer India share, along with GSK entire operations of nutrition business and contract to distribute the latter's over-the-counter (OTC) and oral care brands such as Sensodyne, Eno and Crocin.